Governing bodies
(as at 31 January 2012)
General Meeting
The General Meeting is the supreme governing body of the Company in matters related to its business, organisation and operations. The General Meeting is called by the Board of Directors at least once a year, to take place within six months from the last day of the accounting period. It is convened by way of a written invitation sent to all shareholders no later than 30 days prior to the date of the General Meeting. The General Meeting constitutes a quorum if shareholders holding shares or equivalent securities with the nominal value exceeding a half of the share capital of the Company are present. Voting is by ballot signed by the voter. The General Meeting decides by a simple majority of votes present; any changes to the Articles of Association are decided by a two-thirds majority of all votes present.
The General Meeting has the exclusive authority to:
- approve the Rules of Procedure of the General Meeting;
- decide on amendments to these Articles of Association, unless any change which occurred under any other legal circumstances is involved;
- decide on an increase of the share capital or on the authorisation of the Board of Directors pursuant to Art. 210 of the Commercial Code (i.e. on the authorisation of the Board of Directors to decide on an increase of the share capital) or on the option to offset monetary receivable due from the Company against receivable of payment of the subscription price of shares;
- decide on the reduction of the share capital;
- decide on issue of bonds, where the decision by the General Meeting is required by the Commercial Code;
- decide to wind up the Company with liquidation, appoint and dismiss the liquidator, including determination of the amount of his/her remuneration, approve proposed distribution of the liquidation balance;
- decide on transformation of the Company, unless the law stipulates that the Board of Directors is authorized to make such decision;
- decide on a change in class of shares and any change in the rights attached to individual classes of shares;
- decide on changes in type and form of shares;
- elect and dismiss the members of the Supervisory Board, except for the members of the Supervisory Board elected by employees pursuant to the provisions of Art. 200 of the Commercial Code;
- approve regular and extraordinary financial statements and consolidated financial statements and, in cases set forth by law, also interim financial statements, decide upon the distribution of profits or other own resources or cover of losses, determine the amount and payment date of royalties, and the amount and payment date of dividends, and approve rules for usage of undistributed profits;
- decide to increase the Reserve Fund;
- discuss a Board of Directors‘ annual report on the Company‘s business activity, and on the situation of the Company‘s assets as part of the annual report according to Act No. 563/1991 Coll. on Accounting as amended (hereinafter referred to as the „Act No. 563/1991 Coll.“);
- approve agreements set forth in Art. 67a of the Commercial Code;
- decide on the establishment and the use of other funds created from profits;
- decide on approval of the rules of remuneration to members of the Board of Directors, the Supervisory Board and the Audit Committee and stipulation of remuneration to members of the Board of Directors, the Supervisory Board and the Audit Committee and maturity thereof;
- decide on approval of control agreements, profit transfer agreements and silent partnership agreements and changes thereto, if the Company concludes such agreements;
- decide on approval of agreements on the performance of the office of members of the Supervisory Board and the rules for provision of non-claim perquisites to members of the Supervisory Board of the Company;
- decide on determination of an auditor to carry out mandatory audits or to audit other documents where the determination is required by law;
- elect and dismiss of the members of Audit Committee;
- decide on approval of agreements on the performance of the office of members of the Audit Committee and the rules for provision of non-claim perquisites to members of the Audit Committee; and
- decide on approval of financial assistance if such approval is required by law.
Audit Committee
The Audit Committee has five members and it is an autonomous body of the Company. Members of the Audit Committee are elected and recalled by the Company’s General Meeting. They may be elected from the members of the Supervisory Board or from persons external to the Company. The Audit Committee members are elected for a period of five years and may be re-elected. The General Meeting may also elect up to 5 substitute members of the Audit Committee, designating the order of their succession. The Audit Committee meets as necessary, once in a quarter as a rule, but at least four times in the course of a calendar year. The Audit Committee has a quorum if a simple majority of its members is present at the meeting.
The Audit Committee has the particular authority to:
- monitor the process of compilation of the financial statements and the consolidated financial statements;
- evaluate the effectiveness of the Company’s internal controls, internal audit and risk management system;
- monitor the process of the statutory audit of the financial statements and the consolidated financial statements;
- review the independence of the statutory auditor and the audit firm, and the provision of non-audit services to the Company by the audit firm;
- recommend an auditor;
- receive from and discuss with the auditor all and any information, declarations and communications as per the applicable laws.
Supervisory Board
The Supervisory Board is a supervisory body of the Company. It has fifteen members. It supervises the discharge of the powers by the Board of Directors in managing the business of the Company. The Supervisory Board meets as necessary, once in a quarter as a rule, but at least four times in the course of a calendar year. Two thirds of the Supervisory Board members are elected and recalled by the General Meeting; one third of the Supervisory Board members are elected and recalled by employees of the Company. Members of the Supervisory Board are elected for tenure of five years. The Supervisory Board has a quorum if a simple majority of its members is present at the meeting.
The Supervisory Board has the particular authority to:
- review the regular, extraordinary and consolidated or, as the case may be, interim financial statements and proposals for distribution of profits or the other Company’s resources or for coverage of losses, and to submit its standpoint to the General Meeting;
- elect and recall members of the Board of Directors;
- approve agreements on the performance of the office of members of the Board of Directors in compliance with the provisions of Art. 194 (1) of the Commercial Code;
- decide on approval of the rules for provision of non-claim perquisites to members of the Board of Directors of the Company in compliance with the provisions of Art. 194 (1) of the Commercial Code;
- convene the extraordinary General Meeting, if the interests of the Company so require, and propose any necessary measures to the General Meeting;
- submit to the General Meeting and to the Board of Directors its standpoints, recommendations, proposals and results of its inspection activities;
- review the exercise of the powers of the Board of Directors, based on the request of the shareholders who have shares which nominal value amounts to at least 3% of the registered capital, in respect of the matters determined in the application;
- based on the request of the shareholders who have shares which nominal value amounts to at least 3% of the registered capital, claim the right for compensation of damage incurred by the Company vis-à-vis a member of the Board of Directors;
- decide on issues concerning remuneration and other benefits for Board of Directors members insofar as stipulated by law, Articles of Association, individual agreements on the performance of the office of the Board of Directors members or rules approved by the General Meeting;
- decide on issues concerning remuneration and other benefits for Supervisory Board or Audit Committee members insofar as stipulated by law, Articles of Association, individual agreements on the performance of office or rules approved by the General Meeting;
- review Board of Directors report under Art. 66a (9) of the Commercial Code; to inform the General Meeting of the review of this report and to submit its standpoint to the General Meeting.
The Supervisory Board gives to the Board of Directors its prior consent in matters related to the issuing of shares or other debt instruments; intra-group cooperation agreements; investments in or disposal of ownership interests in other companies that involve more than one quarter of the equity capital; more than ten percent of the Company’s employees; transformation of the Company; personnel changes in the bodies of subsidiary companies; conclusion of agreements on the transfer of assets; disposal of property exceeding one quarter of equity; and the appointment of the Company Secretary.
Under its powers, the Supervisory Board sets up committees as its advisory and initiative bodies. Committees of the Supervisory Board are an inherent part of corporate governance. The Supervisory Board always institutes a Nomination and Remuneration Committee.
Members of Supervisory Board committees are elected and recalled by the Supervisory Board. The tenure of a member of a Supervisory Board committee is 2.5 years. Committees established by the Supervisory Board can comprise only the members of the Supervisory Board.
Board of Directors
The seven-member Board of Directors is a statutory body that manages the business of the Company and acts on its behalf. The Board of Directors decides on all corporate affairs which, by law or the Articles of Association, are not reserved for the General Meeting or the Supervisory Board. As a rule, the Board of Directors meets once every calendar month, but at least 12 times in the course of a calendar year. Members of the Board of Directors are elected and recalled by the Supervisory Board. The tenure of a member of the Board of Directors is 5 years. The Board of Directors has a quorum if a simple majority of its members is present at the meeting.
The Board of Directors has the particular authority to:
- secure the business activities and ensure the operational management of the Company;
- approve the Rules of Procedure of the Board of Directors;
- execute the rights of employer;
- convene the General Meeting;
- ensure the preparation and submit to the General Meeting for discussion the matters coming under the authority of the General Meeting;
- implement the General Meeting resolutions in accordance with law and the Articles of Association;
- ensure due and proper keeping of accounts and Company documents, in line with legal regulations applicable;
- submit to the Supervisory Board for review the Company‘s regular, extraordinary or, as the case may be, interim financial statement, always in its consolidated as well as unconsolidated form, and the proposal for distribution of profit or the other Company’s resources or for coverage of losses and the report by the Board of Directors pursuant to the provisions of Art. 66a (9) of the Commercial Code;
- decide on the conclusion of agreements establishing business companies and cooperatives, agreements establishing associations or interest groups, and on capital investment in business companies or cooperatives; on acquisition, cessation, and alienation of participations in other business companies or cooperatives, without limitation to having their registered office in the Czech Republic;
- use the undistributed profits in accordance with the principles set forth by the General Meeting;
- decide on use of the Funds of the Company in accordance with the principles set forth by the General Meeting;
- prepare the report of the Board of Directors on the business activity of the Company and on its property in accordance with the provisions of Art. 192 (2) of the Commercial Code, annual report according to the provisions of Art. 21 of the Act No. 563/1991 Coll., the provisions of Art. 118 of the Act No. 256/2004 Coll., including the report by the Board of Directors pursuant to the provisions of Art. 66a (9) of the Commercial Code, semi-annual report pursuant to the provisions of Art. 119 of the Act No. 256/2004 Coll., interim report or equivalent quarterly information in accordance with the provisions of Art. 119a of Act No. 256/2004 Coll. and a summary explanatory report pursuant to the provisions of Art. 118 (8) of Act No. 256/2004 Coll.;
- determine the course of business policy;
- stipulate principles for the collective agreement;
- decide on use of the Reserve Fund;
- grant and withdraw the power of proxy;
- organize, in compliance with the Commercial Code, election or dismissal of members of the Supervisory Board by the employees and to approve the election rules for such election or dismissal;
- stipulate the rules for the creation and use of the Social Fund on the basis of collective bargaining;
- enter into an agreement on mandatory audit or, if applicable, on other services to be rendered with the auditor;
- discuss the audit report with the auditor.